Commission on State Mandates: state mandates

Local agencies and school districts receive clearer, earlier notice when the State Controller reduces a reimbursement claim after an audit or review. They can choose whether the reduction is offset against unpaid mandate claims or handled through adjusted payments.

What the law does ​

• Requires the Controller to give written notice within 30 days of adjusting a reimbursement claim after an audit or review, rather than within 30 days after issuing a remittance advice.
• Requires the notice to identify the adjusted claim components and amounts, interest charges, and reasons for the adjustment.
• States that remittance advices and other payment notices do not count as notice of an audit or review adjustment.
• Allows a local agency or school district to choose, for adjustments occurring after January 1, 2027, to offset reduced reimbursement against its unpaid state-mandated-cost claims, starting with the oldest claim, or to adjust claim payments.
• Requires the Controller to first seek an offset against unpaid claims if the claimant does not choose an option within 45 days; if no unpaid claim exists, the Controller must adjust claim payments.

Who it affects ​

• Local agencies and school districts seeking reimbursement for state-mandated costs.
• The State Controller, which audits, reviews, notices, and recovers reduced reimbursement claims.